Paradise going down the drain?

[villafan]

I wonder how their mother company Sportingbet will handle this financially.

* They recently had to pay 33,3 million dollars in cash to the former Paradise owners (lol, success fee pre US ban).

* They will incur costs (writedowns) at £210 million due to the US legislation, but Paradise will still be valued at 63 million pounds in the Sportingbet books.

* They have just lost their chairman and director.


I think Sportinbet/Paradise is out of business in a few months. There are no pieces to pick up.

[Biggle10]

[ QUOTE ]
Paradise should be a case study in business school on how a company can go from #1 in the industry to out of business in a few short years by not listening to their customers, and not keeping up with their industy and technology.

Bye-Bye

[/ QUOTE ]

QFT.

[Eder]

I just remembered I had $$ on there and cashed out...played there many years....sad new bonus...I think Paradise missed a big opportunity... idiots!

[Sniper]

[ QUOTE ]
I wonder how their mother company Sportingbet will handle this financially.

I think Sportinbet/Paradise is out of business in a few months. There are no pieces to pick up.

[/ QUOTE ]

Sportingbet still owns in non-US sports betting business...

[galmost]

Damn, just when I finally qualify for the million dollar freerole. What's the chance that 'Dise will be around til late January?

[villafan]

[ QUOTE ]

Sportingbet still owns in non-US sports betting business...

[/ QUOTE ]

I know that, but if you look at the numbers that the company has presented the market, you will see what I mean. Of their Net Assets at 378.3 million pounds, goodwill was 351.6 million. They are making a write down at 210 million. and will still have goodwill valued at 151.6 million pounds. Paradise is still valued at 63 million pounds, and if they keep losing players, they have to write down this value too. The rest of the goodwill at 88.6 million is the value of the sports betting and sportingbet poker. The question is if the results from these operations are good enough to justify this goodwill. If you look at their results in the year ended in July 2006 excluded American business, they lost money. Add in the fact that they now in November had to pay 33.3 million dollars in cash to the former Paradise owners and they are losing money at the moment, it is obvious that they will have a shortage of cash during the quarter (they had net cash at 35.2 million pounds pr. 13th of October).

[blackjack777]

I played almost entirely there, until last month. It's a ghost-town now.

Yes, just like planet poker. Sad.

[Sniper]

Villa, just because a company is not worth, what it was worth before... doesn't mean it's going out of business...

[villafan]

That is something I know very well.

Believe me, I have seen this story a lot of times, and I have written a lot of articles about similar situations. Companies that have too large goodwill posts in their accounts compared with the real asset value end up either as busto or get bought out for small amounts.

When I predict big trouble for Sportingbet, I am not talking about their equity value that is around 200 million pounds and way too high. I am talking about their last financial report that shows that they have lost their ability to make money. Combine that with

* Low net cash
* Still very high goodwill
* They must pay 33.3 million dollars in cash to the old Paradise owners


then you have a company that have to get access to cash as soon as possible. Borrowing from banks will be very tough when there are no values to take as collateral (remember almost all values are goodwill, as you can see in their last report).

It is how to finance the short term for Sportingbet that is a problem.

[OziBattler]

Got this in a email from ghosttown paradise....

[ QUOTE ]
Dear Aussie

You have $5,064.00 remaining in your PayDay bonus account.

You only have a few days left to cash in on your Paradise Payday bonus! At 23:59 on Saturday, December 2nd your PayDay bonus will be removed from your Pending Bonus account

[/ QUOTE ]

Now to be clear, the $64 was a pending bonus that was NOT part of the payday promo and apparently is supposed to be left there even when they take the stupid "heres 5K you wont clear" bonus away at end of the 30 days.

But this email seems to suggest that they might get sneaky and take away ANY pending bonus once they yank the payday bonus.......another nail in the coffin me thinks [img]/images/graemlins/frown.gif[/img]